PHOENIX (June 29, 2020)—Former Arizona Superintendent of Public Instruction Jaime A. Molera will serve as chairman of Arizonans for Great Schools and a Strong Economy, a committee established by the Arizona Chamber of Commerce & Industry to oppose an initiative that would impose a huge surcharge onto the state income tax.
Molera, a school finance expert, helped author Proposition 301, the ballot initiative voters adopted in 2000 that established a .6% sales tax for K-12 and higher education. That revenue source was extended by the state Legislature in 2018 for an additional 20 years.
This is the second time Molera has chaired a committee to defeat an income tax increase. He chaired the same committee in 2018 when a similar attempt was made to dramatically increase income taxes. That initiative was removed from the ballot by the state Supreme Court due to failures by proponents to properly disclose to voters the scale of the proposed tax increase.
“I was hoping this was a role I would not have to reprise in 2020, but yet again a terribly damaging tax increase could be headed to the fall ballot,” Molera said. “If this initiative were to pass, the highest income tax rate would increase by a whopping 78%, dramatically undermining Arizona’s ability to bounce back strongly from the negative economic effects of the pandemic.”
Were the initiative to secure a place on the November ballot and pass, the proposed income tax surcharge would take Arizona’s top income tax rate from 4.5% to 8%, a nearly 78% increase. At that rate, Arizona would go from having the country’s fifth-most competitive income tax rate to its 38th worst, resulting in a rate higher than states like Massachusetts, Connecticut, and New York. In the region, only California would have a higher income tax rate. [citation 1, 2]
Molera says the proposed income tax surcharge will be especially damaging to small businesses and won’t deliver on its promises for Arizona teachers and schools.
“This income tax initiative aims squarely at small businesses, which file their taxes as individuals, not corporations,” Molera said. “Small businesses have been battered and bruised throughout this pandemic, but they get absolutely walloped with this surcharge. Even worse, this initiative falls far short for the state’s education system, doing nothing for early childhood and higher education, and tying K-12 teacher compensation to highly volatile income tax revenues that will only be further depressed by this risky scheme.
“Over the next several months, I look forward to sharing with Arizona voters why a dramatic income tax increase in the face of historically high unemployment, record jobless claims and business closures is bad for Arizona job creators and teachers.”
Molera is a member of the board of directors for the Arizona Chamber of Commerce & Industry and chairs the Greater Phoenix Chamber of Commerce’s Public Affairs Committee. He is a founding partner at Molera Alvarez, a government affairs firm, and CoNecs North America, a branding, marketing and public relations firm.
“I am so thankful that Jaime Molera, one of Arizona’s foremost education advocates, has joined the campaign to defeat an initiative that is poised to inflict tremendous damage on our state,” Arizona Chamber President and CEO Glenn Hamer said. “Increasing the state income tax would send exactly the wrong message to job creators, especially our small businesses, which would be disproportionately harmed by this wrongheaded proposal. There is no one better than Jaime Molera to help us make our case to Arizona voters.”
Petitions to secure a spot on the November ballot are due to the Secretary of State’s office by July 2.
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